yesterday. three winners abercrombie fitch, activist investor pushing. abbey vi and ownok. >> that will it for "power lunch." "street signs" begins right now. ♪ got to get up ♪ listen to me >> stomp going on in stocks. we're going to get to that in a second. what is apple up to? now buying a data analysis company? apple's former ceo thinks he knows what they're doing and he is here. hello, welcome to "street signs." melissa riding shotgun all week. welcome back. stocks are down more on that in a second, but your other top stories at this hour, how the detroit bankruptcy ruling may impact your city and state. tough day, perhaps some very good news for detroit and the

auto industry and another story that will make you wonder, are we headed for a largely and humanless and jobless economy. we call it a pick me up. >> talk about the stomping in stocks, rally interrupted the dow and s&p 500 suffering their biggest one day drop. the dow on verge of its first three day losing streak since september as it dips to its lowest level in three weeks after saturday straight weeks of gains for the dow and s&p 500. interesting in today's session, we saw what we saw in yesterday's session that is the russell small cap index leading the way down under performing the markets in weakness in the financial today. to bob pisani at the big board. >> hello there. and here's what i'm seeing today and a lot of people have been asking the start of something. i don't see a big start, but i do see a little bit of signs of concerns. put up the full screen. the european close was poor today. had a great run in europe the last couple months. starting to fall apart. brent poor, two to one event declining. buyer interest, how much do you

buy at the bottom? nonexistent today. the dow, we've been down three days in a row, hasn't happened in a long time, down about 1% from the old historic hi highs for the dow. let me show you the vix, popping up, this is the volatility index, at a 1.5 month high now on the vix. let me move on and show you what's going on with the sectors. the cyclical groups weak. materials, consumers and financials and defensive names, staples and utilities to the upside. not surprisingly when you get a down day some of the high beta names are to the downside so, for example, biotechs have had a great run. your big leadership in biotechs. you can see all of them down 2 to 3%. melissa, brian, back to you. >> thanks so much. today's red arrows a green a buy? guys great to have you with us. >> thanks for having us. >> want to start off with you, mark, you're in key corp, up 49% year to date. i'm curious because this is a day where we're seeing

pronounced weakness in financials. seems to be a push/pull in the markets where we get good news, taper is back on the table, that should be good for bank stock because the yield curve would be steepening and see the weakness not just today but in yesterday's session. >> exactly. you know what, we're not as kernz as a firm as to what happens on a day-to-day basis but looking out over the course of three to five years to identify those stocks which are poised to really produce the best risk adjusted returns for our clients. we like banks in general, key is one of our favorites, but, you know, just recently we had the ism new orders index and whenever that eclipses 60, since 1992, typically the three sectors that outperform their earnings growth expectations over the course of the next 12 months by the greatest margin are financials, technology and industrial. we think that bodes well for the financial sector and with what we expect to be a significant pick up in capital spending over the course of the next 12 to 18 months, that capital spending xwizing to have to be financed

by someone. that would be the banks. and key has a great management team. we feel it's und valued and we feel it should benefit from that increase in capital spending. >> sandy, want to go to you. how do you feel about december and going into the end of the year with such tremendous gains so far to date? >> i mean december is actually one of the best months for the markets since 1950. i think it's up 1.61%. i think it will get better through here. looking at 2014 we will be flattish really around 1800 looking out that far. right now you're trading around 17 times earnings and i think the multiple will shrink down, it's going to compress to 15.5 times earnings. the multiple will compress as janet yellen begins to taper. >> the market may be overvalued and may be undervalued and fairly valued as a whole, right? i mean who cares. there's a lot of really interesting stocks out there that are probably mispriced. one is a retailer you like that we've probably i don't think talked about here, texas based

kons. it's been hot. >> so kons, they're 90% texas, it's only got about 70 stores and i think they have a good three to times store base potential to continue to grow. a specialty retailer o of mattresses, bedding, furniture and appliances and the igs like that. not only do i like the fact they've gone from appliances and electronics towards higher ticket and higher margin items like mattresses, bedding furniture but they've got their own in-house credit option. if you walk into a sears or best buy you may be denied, you may not be able to get a credit card. there you will be approved and if you neat their underwriting standards you're going to get on their in-house credit program which is very profitable for conns. >> you're buying a credit card operation too. isn't that a risk to the story? >> that is a risk, but also the reward. i think it's something that will work out really, really well for them over the long run. but it almost is more like a, you know, payday loan company or something like that as opposed to a true retailer. >> unfortunately named c orknn

credit. >> 3d printing probably going to be the most disruptive industry the next decade but the stock is trading at 128 times trailing earnings. it's been red hot here. hard to see how a value guy like you is in a name like 3d? >> it's interesting. we've owned 3d for the better part of a decade. it's been one we were arguably early on but one that certainly is coming around. today, they're over in germany at the conference and introduced 12 new products so they could take the earnings and bring them down to the bottom line right now, but they want to push it out a little bit and invest in the growth of the company and that's what's happening. they've got a pro x 950 they introduced today that's going to basically take the cost of a part and shrink it by 25 times so it's ten times faster than any of their competitors. it can print something the size of a pin head to the size of a live tiger. this is very interesting and something that's going to really help the company move forward. >> and mark, on sea gate

technology, on my show "fast money" this space is a space named one could short given the tremendous gains we've seen. does sea gate have enough exposure to flash? >> yeah. you know one of the great things about seagate it's really understanding that it needs to begin moving from the declining pc market into more of the cloud based storage and the reason we like seagate due to the fact we need data storage exposure. as businesses begin to ramp up the capital spending over the next 12 to 18 months they will invest in data storage and when you look at the two most significant players that we've identified, seagate and western digital, and you look at the valuations and the dividend yields, seagate really looks to be the much more attractive player out of the two. >> all right. there's four picks. mark and sandy, thank you very much. really appreciate it. >> thanks, brian, melissa. >> on deck, another deal, what

exactly is apple up to? former ceo john sculley thinks he knows and he's here. plus why drones and ipads may be the worst thing to ever happen to certain parts of the u.s. economy. we'll explain ahead. >> we're talking numbers on test tesla and why the self-fy craze is for the birds. "street signs" back in a flash. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account.

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>> jpmorgan back. yo -- welcome back. a judge has ruled detroit can proceed with bankruptcy. detroit not the only city paying attention to this ruling today. >> that's for sure, brian. not that other cities are envying the spot detroit is in, but it has to be tantalizing to mayors and city administrators dealing with a lot of the same problems. as a result of this ruling detroit has a clear path to get out from billions of dollars of unfunded pension liabilities and cut off payments to municipal bond holders who thought their investments with this city were safe and means a state can take over essentially a city's finances, planning the local officials and restructure a city rather than simply bailing it out. that task now falls to the state appointed emergency manager kevyn orr who says this bankruptcy will allow detroit to

restructure nice and feet. >> there is an owe va tour, an opportunity for us to work together on a consensual resolution so we won't have to get to a cram down for the benefit of the city and for all of the interested stakeholders, including retirees, employees and citizens. >> but a lot of those stakeholders, namely the unions and the retirees, have none of it. many of them were here to protest. thousands of them are affected by this ruling, the potential for cuts in their pension benefits and they say judge steven rhodes' decision to keep this restructuring in the bankruptcy court does them no good. >> so what his he telling me? sorry, we're going to take your pension and we're going to make you homeless, starve you out, and send you to a soup line? we're telling judge rhodes go to hell. >> well, that will be decided ultimately in the appeals court. the city's largest union, the american federation of state,

county and municipal employees filed its notice of apeople. the union points out many of these workers are getting by on pensions right now of about $19,000 a year. that would be cut substantially under orr's plan of reorganization and they say that these pensioners have no other safety. many don't have social security and many, indeed, will be on the street. guys? >> that is a tough story. scott cohn we understand the passion behind it. folks, while you may not care about the muni bond market or detroit story, you need to care about this case because it may impact your city, your town, your state. let's bring in rick santelli. rick, expound on this here. detroit, many people believe, is just a precursor of what is to come perhaps for cities that look a lot like the one you are standing in right now? >> and it's so funny, it happened today because the big news in chicago and if not the entire state of illinois is that there's going to be a vote

ultimately, whether it's today or soon, to try to deal with our under funded pension liabilities. i would look at it this way, it's a very straight forward issue on many levels. if a city can deal with public tensions in the same way it deals with other debt, then, indeed, many cities like chicago or states like illinois may be able to deal with their fiscal underfundedness in a more -- in an easier fashion. i think this would potentially set a pick for illinois to now deal with this problem in a more efficient process. if i'm a holder of munis, i'm not happy to see any entity go into bankruptcy but when i look at how the money is carved up pensions no special treatment the allocation of resources would be more fair. in the grand scheme of things i think this is a big positive for the rule of law for all bond

holders. >> rick, have we seen any differentiation in terms of how muni bonds of other big cities with large underfunded pensions how they trade versus -- i mean detroit obviously has taken a hair cut. a lot of investors from the investment standpoint were expecting this. do you have any grasp of how other muni bonds similar profiles have been trading? >> no. we haven't seen a lot of volatility. where the volatility has been today actually is in the insurers. we've seen a lot of activity in some of the big insurers in terms of where their prices were before and after the ruling. but i think we need to wait to see how rating agencies ultimately weigh in on this. fitch, right after the 11 eastern ruling out of detroit, about 20 minutes later, came up with a piece tog about how they're monitoring this in the context of how it will impact things like general obligation muni bonds. i will defer to some of the other big agencies as i'm sure

in the next few hours they're going to come out with updates. >> watching the headlines for those as well. rick santelli, thank you very much. let's bring in cnbc contributor alexandria. broaden this story out if you can, right. tell us how detroit and we are now just at the beginning of the beginning in this case. it will go on. but how this case is likely to impact our viewers' towns, cities, states wherever they may be. >> i think we're sort of already into the beginning. that started certainly earlier this year. you know, look, the filing for the bankruptcy, everyone certainly expected that there was a very good chance that bankruptcy would be approved. i've said many, many times over the course of the last several months that detroit is definitely a situation unto it itself, one that was coming for a very long time. there certainly are cases where

municipal bonds default, when municipalities file for bankruptcy. we saw an effect on munis with detroit. i don't see an effect on the rest of the market. >> are there munis out there alexandria, that might be buying opportunities because they're trading off because of the notion they are a large city with under funded pension obligations and therefore they may be, you know, discount at a discount right now? >> you know, again, something that i've said a number of times is that people need to look at their municipal bond money in a conservative fashion. i get very nervous when people start to look at certain distressed municipalities w we've talked about hedge funds being buyers right now, and i think they will be more active right now, i would recommend people stay with high grade names and not look at names that are under distress right now. puerto rico being an example of that. >> it was a pleasure. thank you very much for joining us on "street signs." >> thank you. >> switch gears to technology. i talk about apple. their shares are up about 2%

after ubs upgraded the stock from to a buy from a neutral. apple is acquiring top seed for $2 million, follow apple's buy of prime sense. 3d sensors, twitter data analytics. what is apple up to? with us former ceo of apple, n john sculley, gene monster of piper jaffray, and jon fortt is here. these are sort of bizarre deals to a company that doesn't do a lot of deals. what do you think they're doing? you believe they've got a grand strategy? >> i really like this acquisition because it shows that apple is at lot more than just doing better and better hardware. apple is an end to end systems company and this gives apple a chance to start to show whether it just may have a creative leap in its thoughts down the road. for example, we're looking at

big data analytics, very hot area, the ability to do search and indexing of every twitter feed that's happened. we know twitter will be the second screen for television. could be part of apple tv. the ability to tie it in into iad or ibeacon. i think we will shift our focus on apple's value toward the $16 billion revenue of istore and itunes and this fits beautifully into a lot of things they could do that could become disruptive. >> gene, when you look at these acquisitions are they clues? when apple bought au then tech it was criticized an then it gave us a clue as to what was going to be in the iphone 5. you take a look at these two and what comes to mind? are these two components of an apple tv offering? the notion that you can move your arm and change the channel? or that it can mine your information and know what you want to watch?

>> well, i think the prime sense clearly is related to apple tv and more along the gaming side of it and really changing the gaming industry and making your tv part of the gaming experience. i think what we're talking about with topsy, that could be more along the lines of services as jon was talking about. this could be something they could integrate some of the intelligence around trends into services like siri. for example, if you ask siri a question, having an awareness of what some of the trends are is important. the big theme here is that apple is looking beyond just the core devices and they're trying to look more at the service layer which is an important differentiator longer term around these devices. >> i tell you another possibility around prime sense this has to be do with mapping, some of prime sense's ip has to do with collecting better maps data. the thing with topsy apple needs to do is prove that it can be a more data savvy company. i've heard from entrepreneurs in the valley they hesitate to go

to apple to sell to apple because the executives there tend to be like here's the answer i want. it's their philosophy. the way they look at the world. here's how i want the device to look at the end. with data you can't presuppose what you want the answer to be. you have to tweak the algorithm, go where the data leads you. hopefully they're acquiring good ip and people they'll keep this time, not lose like they did with siri and get smarter about the industry -- >> i'll take the different side of this, john sculley. i understand they might use the data create better products more? tune with the universe. don't create problems products more in tune with the twitter verse. their greatest inventions, creations, itunes, all the things they did, they did in the vacuum of a few personalities and genius and good teams behind them. >> well, what i would say is that i actually agree with the observation that google's ahead

of apple in terms of data analytics. google is really a company that at its core instincts and inventions have always been around mathematical algorithms and analytics and a space that i think apple could exploit -- >> what do you do with the date? 97 or 98% of google's revenue is from search words. >> think about what they've been able to accomplish with maps. a lot of that is because they're smart about data being able to integrate data set. apple is moving into a space where they need to be able to do that better. they were caught flat footed with the mapping issues, thought the they could put out a beautiful product and white work better than it did out the door. i think that was the first canary in the coal mine showing they have to think differently about the way they develop data centric products and hopefully this team from topsy will help them with that. >> gene, i would think that -- i would think that being able to analyze data would enable apple to make its revenue streams more

robust. we can use that to sell advertising. >> well, the easy way to think about topsy, this is an advertising play, i think it's beyond that, at the service layer and maybe one way to think about what is data and services mean, it's just making more intelligence products, more intelligent responses from products and ultimately i think that maybe the advertising angle is something they'll pursue more. they wi they've failed at it. they're losing at the service layer, losing to google and need better data to improve that layer. >> i think that's right and i think that this gives them a chance with topsy labs, to be able to maybe knit together ibeacon, ability to go into stores and tell exactly where somebody is, connect it with on-line offers and tie that back to analytics all based on prediction. it's a potentially very interesting acquisition thank you very much.

if i ran a data analysis firm, all my clients need more data analysis. that would be the first conclusion of my data. more data, more analysis, more billing. thank you all very much. that's why i don't run a data analysis company. five years after being left for dead one big american industry is back with a vengeance. folks in elkhart, indiana, know what we're talking about. >> why billy joel might be music to ears of investors today. "street signs" will be right back ♪ we're all in the mood for a melody and you've got us feeling all right ♪ i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just get on the plane and relax. [ julian ] having a card that doesn't charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u.s. when i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me.

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u.s. automakers reporting pretty good sales number in november. the stocks are down today. >> did you see the numbers for november? >> staggering. >> unbelievable. the sales pace coming in at 16.4 million vehicles according to auto data and leading the way, the big three. they all had better than expected sales, chrysler in particular really stands out, increase in sales of 16%. the street was expecting something closer to 10%. the bottom line is this, brian and melissa, we saw much stronger than expected traffic

for black friday and the holiday weekend, we saw the promotion out there, it clearly benefited in terms of the number of sales that they racked up last month. >> another big bright spot, phil, i mean a big bright spot in the sort of auto related industry is looking through your data the fact that class a, the big boys, right, the big dog rvs, are selling so well has to be really good news for the rv industry? >> yeah. they've been struggling. this is going to be the fifth straight year that they are expecting to increase rv sales and if you go back to the recession, i mean they were hit and hit hard. 2014 shipments coming in at about 335,000, that's way up from where we were five years ago. up 6.1% from where we'll end this year. and again, fifth straight year of sales growth and it's the economy as well as consumer confidence and don't forget, a lot of people, guys, like to get a new rv let's say every six, seven years. as you take a look at shares of

win na beggo and thor who have benefitted, haven't been able to because of the recession. now they're going back in and saying look what i can get in the rv now. a lot of things have come along as far as technology and creature comforts and that's helping when people go out to look for one. >> that's what brian was thinking, six or seven years since you upgraded your rv. >> no. i have an rv. >> do you really? >> i do. for car racing, 1998 american eagle. bought it used. >> no thoughts of upgrading and seeing what you can get. >> have you seen the prices? it's running fine. we put a kingdome on top of the thing to give you tv. two eagles painted on the back. some day i will show a picture of sullivan family rv. >> i hope so. >> me and phil will go for a ride if that's your attitude. >> sure you will. >> got a washer, dryer. >> go ahead. leave me behind. herb greenberg is back and going nuts over doughnuts today. he'll explain ahead. >> he also won't be in the rv.

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take a look at the markets, red arrows across the board. the s&p down .6%. financials, industrials, cyclicals, those are the weakest sectors we're looking at. real questions about the economy. at least today. >> and piteny beaus which had been leading the worst performer in the s&p 500. before we get to street talk courtney reagan has breaking news for us. >> that's right. we are getting details from walmart about cyber monday. the largest retailer saying that cyber monday was its best on-line sales day so far in history. and the five-day stretch from

thanksgiving through cyber monday also record-breaking for walmart on-line with over a billion page views during the period of that five-day stretch. some of the top selling items, the led hg tv. the apple ipad 2, the 16 gig with the wi-fi, fisher-price power wheels, let's see we got the trio stealth tablet as well and the wall mount for some of those hd tvs. so all in all a pretty successful cyber monday for walmart.com and the five-day stretch. we know the company said black friday was a record-breaking day. with more than 22 million customers. sales we don't know for either day in store or on-line. back to you. >> all right. thanks so much. >> you know, a quick note on black friday and cyber monday before we get to street talk, shouldn't they always go up? more people in america, we use computers more and the price of everything generally goes up over time. it's called -- so isn't every

year going to be a record year. >> if that's the base case scenario, the population still spending the amount as the previous year which is not the case. >> retail sales except for '08 have gone up every year. >> stocks moving on recommendations from the street. here we go. abercrombie & fitch after they are urging the retail board considering a new ceo. >> they sent a letter to the board highlighting the contract ex pir rags of that controversial ceo michael jeffreys. it's up february 1 of 2014, state it is a ben ficial owner of 400,000 shares and pushing, down year to date. >> i spoke to engaged capital -- >> use a clip from squawk on the street if their presentation. >> i don't know. i know the principal has had a long-standing relationship when he was at relational with the management team at a and f. not a new position, not a new interaction. >> but they're still nudging. >> nudging because the ceo is

out of touch he says. imax downgraded. >> cut their rating from neutral to a buy. trades at about 67 times trailing earnings. the target remains about 30 bucks per share. >> you always put in a smaller lesser known name so today that name is clayton williams. >> it's not a guy. it's a company. like clayton williams you've been downgraded get out. clayton williams is a texas based oil and gas company up to a buy at global hunter securities, the target goes to 100 which is about a 30% upside. they think it's a target for people who want to get into the basin in texas which might buy this company which has leases. >> shares of msg slightly lower despite announcing a deal with billy joel. >> big announcement. he's becoming the first artist and residence at a major arena, bunch of concerts, january, february, march, april, may. >> he doesn't live there, though, does he. >> you know what, he's billy

joel. >> residence. >> they might give him a suite upstairs. what ticks me off. >> among other things. >> i went on ticketmaster.com right after this was a nounsed, right after announced, every show is sold out and stub hub is filled with it tickets. how did that happen? that quickly? >> a machine. >> i was hoping to buy it tickets -- >> machine bought all the tickets. >> data analysis. they knew billy joel -- >> robots buying the tickets from you. >> i would see it. shares of tesla jumping on a positive note out of morgan stanley. analyst adam jones saying the model s fires while disruptive not materially damage tesla's business. it's their top pick in the automaker sector. what do you think? is tesla a buy? on the technicals, do you agree with morgan stanley, tesla's a buy? >> you know, it all depends on what price you're starting from. >> at this price. >> right.

you know -- >> don't be snarky, that's my job. >> i'm on fire in anticipation talking about tesla. there's my brian for you. the thing with analysts, be careful where they start from, right. he's had a 153 call on this prior to his call that this is going to be his top pick for 2014 in the auto sector. granted this guy will know more about the auto sector than i'll ever find out in my lifetime but he's way smarter than me but i will tell you this about analysts be careful about what they say. you have to know where they've been previously too get an understanding of what they're talking about now. that's what's going on with tesla. the price had fallen so far below his target price he kim out and said, you know, this is cheap compared to where i think it could go. it's up 14% or $17. happy days. but tesla has a problem, don't they? they mishandled the messaging on the fires on their cars and have ham handed this when it comes to the national highway traffic and safety administration's inquiry.

>> what they're doing. now back in 1980s, audi had a problem with this with an accelerator and i believe it was toyota in 2010, sales fell between 10 to 20% according to barkley's. that's what tesla is up against. they have to message this and get ahead of it and done a poor job of that. as far as i'm concerned, it's a hold to wait until the smoke goes out. >> big gain in today's session but at the same time only back to early november levels. give me the levels to watch? >> well, i'm still a buyer here. even given today's fantastic performance. when you pull up that year to date chart it's a story that most of us are familiar with. the stock with the fantastic run over 400% from just the spring alone. we settle into that textbook head and shoulders top and just a month or so ago we get a breakdown below the neckline around 160. now importantly that projects measure downside to 125. au sensibly we've hit that downside target. not only that but hold the 200 day moving average, a key measure of longer term support.

we establish a nice little base and today we get that breakout on the analyst upgrade. i think the stock trades 160, we revisit that neckline, previous support becomes resistps on the way back up and happens to coinside with the 50 day moving average. doesn't get cyclical than this. be a buyer right here right now. >> i'm going to watch that 50 day, starting to dangle over rich ross. thank you very much. chart says buy, andy bush says hold on to that. >> i like his imitation of you. threw out a bad joke. very good imitation. >> car puns. i'm tired of them. >> got to let that go. >> check out the on-line edition of talking numbers with our partnership with yahoo! finance. doughnuts leavie inine ining he bad taste in his mouth. >> the sell fy craze to new heights. the story behind this bizarre video. tdd#: 1-888-648-6021 there are trading opportunities

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crude gaining 2.3% on the session on news that transcanada will start that gulf coast pipeline on january 3rd. >> all right. krispy kreme from oil to doughnuts seems appropriate somehow, taking today after reporting worse than expected quarterly results that stock down almost 20%. let's bring in our good friend and dough nut aficionado herb green burg. there's a big discrepancy between the franchisee and the company owned stores. i understand all stores are different, markets are different, but the gap was so big i noticed it perked your brow up a little bit. >> it was huge. you had company owned stores up 3.7%, franchise stores up 10%, 10.7%, something like that. typically they had been running on par with one another and when the company was asked on the conference call yesterday about this they said, you know, they gave an explanation that wasn't really an explanation until they got to something that piqued my interest. almost a matter of factually

they talked about cannibalization in the u.s. they talked about this in internationally for quarter after quarter but they loosely used the words cannibalization like it's okay. any time you hear cannibalization that can ultimately lead to saturation and talk about something they call the honeymoon effect. it's when they talk about it in charlotte, north carolina, where they open up stores, big opening periods and then boom, you know, from 60 to 0, and suddenly you have a deceleration in growth. i don't know what's really going on there, but what i can tell you is, you cannot sugar coat it, the growth of this company is slowing and slowing quickly. >> i love how he sprinkled in the doughnut pun. >> you guys are terrible. >> herb, talk about the cloud here because you're fired up about rack space, one you and i have followed for quite some time. google announcing it's entering this space, the cloud territory space, and we're seeing not just rack space fall but amazon down, a number of cloud players down.

>> but remember, the pure play in the space is rack space. and rack space, you know, we've always talked about this, mentioned it on air. you know, hosted serving what this is, is a commodity and with big companies like google or amazon or ibm or microsoft, they can use that as a loss leader to bring people in. so that's why you're seeing price wars and cost cutting in that space led by amazon and now google. if you're sitting there and you're rack space what do you do? it has to have an impact. i wrote something on the street about it and i was thinking, you know, with the stock being half of its highs, rack space's stock, is there a point? look they have good technology, marketing, market share, does somebody come out and buy the company or try to? but then you look at it and say well, it's trading at 53 times trailing, 48 times forward earnings, but sales three times, you know, 3.5 times price to sales. so is there a valuation thing there to the right buyer? maybe they see something.

>> yeah. good questions, herb. herb greenberg. take a look at this live picture here, president obama talking health care at the white house. let's get to jonn harwood. >> the president is beginning a campaign to try to move past the difficulties of the website market the positive virtues of obama care. some of the things that have taken effect, such as letting people, kids stay on their parents policies until they're 26 years old. the refusal to let insurance companies bar people from insurance with preexisting conditions. but the president is also going to try to continue to push enrollment in obama care in these exchanges that are being run by the federal government in 36 states. they've got a goal of getting million people by the end of the enrollment period at the end of march. they have to have the right kind of people, that is so say, younger, healthier people to balance the less healthy people who are more expensive to insure. the president has a lot of

challenges on health care even if that website gets fixed. we're not going to know how fixed it is until we see the enrollment figures are not only for mid december but beyond that over the next couple months. >> john harwood, thank you very much. appreciate it. >> coming up, high schoolers go head to head in the battle of the brain. how does america stack up? a hint, not well. >> and rise of the machinesp. amazon's drones and applebee's digital waiters. are we headed for a humanless economy? we'll debate that. first to bill and kelly, what's coming up on the "closing bell"? >> two humans here. >> for now. hi, guys, lots of red arrows on wall street, one silver lightning apple. >> that stock has been up recently, up 15% in the past two months. is it time to hop back on the appling band wagon. >> who needs stocks when you can invest in drones. one venture capitalist who's trying to cash in on the drone wars. >> see if we get a late day sell-off like the last two

trading sessions. you'll find out at the top of the hour on "closing bell." we'll see you then. more "street signs" coming your way after this. so ally bank has a raise your rate cd that won't trap me in a rate. that's correct. cause i'm really nervous about getting trapped. why's that? uh, mark? go get help! i have my reasons. look, you don't have to feel trapped with our raise your rate cd. if our rate on this cd goes up, yours can too. oh that sounds nice. don't feel trapped with the ally raise your rate cd. ally bank. your money needs an ally.

welcome back. some unfortunate news about the state of education in america. a new report says u.s. high schoolers are falling far behind their peers in other countries. american students ranked below average in math, ranking only number 26 out of 34 developed countries. the numbers were near average in science and reading. that's basically the same as it was ten years ago. showing no improvement in any basic high school curriculum. those results based off an international assessment test given to students in 65 countries. >> as our students seem to be falling behind, the economy is relying more and more on machines to do jobs. now the service industry, self-check-in at airports, hotels, and applebee's saying customers will be ordering and paying the bill from tablets by the end of the year. are service jobs becoming extinct. sounds funny in a way, but it's

not. certain people in the population for whom service jobs are their life. and if we say, sorry, we don't need a waitress or hotel check-in clerk, we'll have real problems in this economy. >> listen, if you have a job that can be sort of boiled down to discreet rules and instructions, those jobs can be automated. they will be automated. i think we really are heading toward an economy which is going to look a lot more like amazon. i know amazon you have a small number of products to generate most of the revenues. that's what you have with the u.s. economy. can you have a small number of workers generating most of the revenue, most of the income. everybody else, they may have flatter wages. >> aren't these the same sports of concerns highlighted at every single turning point this economy has ever seen, like the industrial revolution, for instance, derek? isn't this an opportunity for our economy to move into areas

that are -- i don't want to say efficient or more valuable, higher growth, better jobs out there, instead of being a waiter or waitress? >> right. i think reality check. technology has been replacing people for centuries. you had tractor replacing farmers, when 40% of this country was working in agriculture. even hand saw probably replaced some chrome magnum. it's ant an issue, are we in something new. it's job growth. compare it to the last job recovery, obama versus bush. we're creating jobs faster than we were after the 2001 recession. i don't think we're seeing robot-caused inflated unemployment right now. what there is room to worry about, though, is the idea that are the machines getting smarter, faster than we're getting smarter? >> i think they are. i understand your point and in ideal economy, the displaced

worker will now work for the robot or ipad company selling or -- >> that's not always going to happen for many reasons. let's say this new ipad technology puts 50,000 waiters and wait ress out of work. where do they go in this economy? >> theet reticily they could get jobs at other personal service industry. they could become therapists, butlers. all of these people with middle class jobs who will be losing their jobs. they're going to try to take those job. if you have low skills, you'll be in bad shape. what sdaisderek said, 40 % farm. another worker in 1900 who never got new jobs. horses. replaced by cars. our skills are like the farmers of 1900s or more like horses replaced by cars and they didn't get new jobs. >> i think technology is developing so quickly. take the driverless car.

once they get approved, they will replace truckers and all sorts of other -- >> fine. where do they go? >> five years ago -- >> so, down the line can we make leaps and bounds in terms of worker retraining in order to place these people in jobs. >> five years ago those jobs couldn't be be replaced. >> let me say this. we don't have any good information about the future. we don't know where technology is going to go and where human skills is going to go. we have information about the past. everything we know says if we send people to college, they're not only more likely to earn more, more likely to be employed, more likely to be satisfied in their work and doing good work. if we're asking for solutions, what do we do? how do we prepare for a solution we don't know how advanced robotics is going to be, software is going to be? college is an extremely good way to ensure, if you will, ensure against the possibility that computers and technology is going faster than we are. >> we've had that -- >> a lot of people go to college.

we've done that. >> you know what we need -- >> only 30% of the workforce has a bachelor. you have only a third of the workforce right now that has a bachelor degree. let's not give up now. >> let's -- derek, you're right. we have to go. let's back up a notch and stop a few million kids from dropping out of high school every year. statistics show, there's no economic future there, right? my mother is a high school dropout. true story. she's one of the few that got out and, you know, whatever. derek and jim, thank you very much. we'll continue the discussion. >> we thought about this because of all this talk about the amazon drone. tonight i'll be speaking to drone maker, aerovironment. >> we'll dial it back on a light night. bird and camera. [ imitating car engine ] that's mine. ♪ that's mine.

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a 50,000-pound, ingeniously wired machine that optimizes raw data to help safely discover and maximize resources in extreme conditions. our current situation seems rather extreme. why can't we maximize our... ready. ♪ brilliant. let's get out of here. warp speed. ♪ sorry, "closing bell." this is the epic selfie. >> "closing bell" starts right now. >> started ten minutes ago. welcome to the "closing bell." i'm kelly evans at new york stock exchange where it's not looking too good with an hour to go in the trading day. >> what if they gave a dip and nobody bought it? >> that's what we're looking at today. 16,000. we came, we saw. we